Ekubo Protocol is a special type of Automated Market Maker (AMM) designed to work on Starknet, a system that helps Ethereum work faster and cheaper. Its main goal is to make trading smoother for those who swap and to help those who provide funds (liquidity providers) get better returns.
What is Ekubo
Here’s how it works:
- Singleton Architecture: This means all trading pools are managed in one place, saving on costs, especially in making token transfers more efficient.
- Concentrated Liquidity: Liquidity providers can choose specific price ranges to put their money in. This not only helps with better pricing but also makes their investment more effective.
- Open for Developers: Other developers can build new types of trading pools, adding more features like special oracles or limit orders.
- Smart Fee Structure: When you take your money out, the fees change based on how efficiently your capital was used. The more efficient it is, the lower the fees. This encourages better use of money in the pool.
In summary, Ekubo is trying to solve some big issues in AMMs, like high gas fees and making sure capital is used effectively. It's also about making it easier for people to manage their investments and making the system more adaptable. In short, Ekubo Protocol is looking to bring new and improved ways to the world of automated market making.
Ekubo review
Pros
Gas-Saving Architecture
Deferred token transfers significantly reduce gas fees.
Optimized Liquidity
Allows precise placement of liquidity for enhanced pricing and capital use.
Flexible Extensibility
Supports third-party developments for diversified pool types and features.
Unique Fee Approach
Withdrawal fee system promotes low fees, benefiting users.
Efficient Flash Accounting
Facilitates multiple actions in a single transaction for strategies like arbitrage.
Higher Capital Returns
Design enables earning comparable fees with less investment.
Cons
Layer Specificity
Exclusively built for Starknet, potentially limiting wider accessibility.
Emerging Technology Risks
New platform may encounter bugs or smart contract issues.
External Developer Risk
Third-party extensions could introduce security vulnerabilities.
Liquidity Provision Risk
Impermanent loss remains a concern in AMM liquidity provision.